Pharmaceutical innovations

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Pharmaceutical innovations are currently guided by a patent system,[1] the patent system protects the innovator of medicines for a period of time. The patent system does not currently stimulate innovation or pricing that provides access to medicine for those who need it the most, It provides for profitable innovation.[2] As of 2014 about $140 Billion is spent on research and development of pharmaceuticals which produces 25-35 new drugs. Technology, which is transforming science, medicine, and research tools has increased the speed at which we can analyze data but we currently still must test the products which is a lengthy process.[3] Differences in the performance of medical care may be due to variation in the introduction and circulation of pharmaceutical innovations.[4]

Pharmaceutical innovation may not apply the same definition of "initiative" as other industries because while a product might use a new molecule or formula, that by itself holds very little value. For people that need the product the health benefits that were not previously achievable may be a deciding factor as to whether or not it is initiative. While a pharmaceutical company may view a product that fills a niche as innovative if it can produce a profit.[5]

A decline in research and development has been coined as Eroom's Law.[6][7]

Current Model[edit]

The FDA has implemented the Breakthrough Therapy Designation which should help bring new needed products to the market faster.[3]  One of the key concerns in the current patent system is that an innovation patent is overly generous given that it has a very low inventiveness threshold.[8]

The Medicines Patent Pool (MPP), is a United Nations-backed organisation founded in July 2010[9] and based in Geneva, Switzerland. The MPP aims to improve access to appropriate, affordable HIV medicines and technologies for people living with HIV in developing countries. Working in partnership with a range of stakeholders, the MPP opens the door to generic low-cost production of key HIV therapies as well as fixed-dose combinations and paediatric formulations by creating a pool of relevant patents for sub-licensing and product development.[10]


Kristopher J. Hult has proposed a new measurement based on novel and incremental innovation. The model predicts a decline of 40% for the 2010s.[11]

One current way to measure is the Internal rate of return, which is used to measure and compare the profitability of investments. Reuters used the method to measure 2012 and found that the rate fell from 7.7% to 7.2%.[12]


Regulatory uncertainty is one area that stifles innovation. The approval processes are becoming increasingly complex.[13]

Proposed Models[edit]

The Health Impact Fund (HIF) is a proposed pay-for-performance mechanism that would provide a market-based solution to problems concerning the development and distribution of medicines globally. It would incentivize the research and development of new pharmaceutical products that make substantial reductions in the global burden of disease. The HIF is the creation of a team of researchers led by the Yale philosopher Thomas Pogge and the University of Calgary economist Aidan Hollis, and is promoted by the non-profit organization Incentives for Global Health (IGH).[14]

See also[edit]


  1. ^ Review of the Innovation Patent System (PDF). 2014. p. 2. ISBN 978-0-9804542-7-7. Archived from the original (PDF) on 2015-02-27.
  2. ^ Pogge, Thomas, Medicine for the 99 percent, retrieved 2015-04-15
  3. ^ a b Milet, Sylvain. "MedidataVoice: The Next Wave Of Pharmaceutical Innovation: An Interview With Bernard Munos". Retrieved 2015-04-15.
  4. ^ Westerling, Ragnar; Westin, Marcus; McKee, Martin; Hoffmann, Rasmus; Plug, Iris; Rey, Grégoire; Jougla, Eric; Lang, Katrin; Pärna, Kersti; Alfonso, José L.; MacKenbach, Johan P. (2014). "The timing of introduction of pharmaceutical innovations in seven European countries". Journal of Evaluation in Clinical Practice. 20 (4): 301–310. doi:10.1111/jep.12122. PMC 4282430. PMID 24750393.
  5. ^ Morgan, Steven; Lopert, Ruth; Greyson, Devon (2008). "Toward a definition of pharmaceutical innovation". Open Med. 2 (1): e4–7. PMC 3091590. PMID 21602949.
  6. ^ Feyman, Yevgeniy (13 April 2015). "Is Pharmaceutical Productivity In Decline? Maybe Not". Forbes. Retrieved 16 April 2015.
  7. ^ Scannell, JW; Blanckley, A; Boldon, H; Warrington, B (2012). "Eroom's Law in pharmaceutical R&D". Nature Reviews Drug Discovery. 11 (3): 191–200. doi:10.1038/nrd3681. PMID 22378269. S2CID 3344476.
  8. ^ "Review of the Innovation Patent System" (PDF). Archived from the original (PDF) on 2015-02-27. Retrieved 2015-04-15.
  9. ^[permanent dead link]
  10. ^ RUNYOWA, TAVENGWA. "Medicines Patent Pool Aims To Increase Access To HIV Drugs In Developing Countries". IP Watch. Retrieved 2 June 2015.
  11. ^ Hult, Kristopher. "Kristopher J. Hult: Research". University of Chicago - Department of Economics. Archived from the original on 2015-04-16. Retrieved 2015-04-16.
  12. ^ "Measuring the return from pharmaceutical innovation 2012". Reuters. Archived from the original on 16 April 2015. Retrieved 16 April 2015.
  13. ^ "measuring the return from pharmaceutical innovation 2014" (PDF). Retrieved 2015-04-15.
  14. ^ Hollis, A; Grootendorst, P; Levine, DK; Pogge, T; Edwards, AM (2011). "New approaches to rewarding pharmaceutical innovation". Canadian Medical Association Journal. 183 (6): 681–5. doi:10.1503/cmaj.100375. PMC 3071389. PMID 21149519.